Texas Veteran Tax Benefits & Estate Planning Guide

Table of Content:

The “Lone Star” state has substantial Texas Veteran tax breaks, which help with Veteran estate planning in Texas for Veterans and their families. This comprehensive Texas Veteran tax benefits and Texas Veteran estate planning guide covers everything from property tax exemptions and sales tax rules to trusts and fiduciary protections.

The topics covered are presented in ways that make the information about Texas Veteran tax breaks easier to understand, including Texas Veteran property tax benefits available from the Texas county tax office that Veterans use for their property, and the sales tax exemption for Veterans.

There are simple, practical suggestions that help Veterans claim the Texas Veteran property tax benefits they’ve earned, such as Texas Veteran discounts on taxes obtained by using the Texas disabled Veteran property tax form and filing it at the Texas county tax office Veterans use where their property is located.

Texas Veteran Tax Benefits & Deductions

There are many Texas Veteran tax breaks. Here are the state and local tax exemptions available to Texas Veterans, including Texan Veteran property tax benefits, sales tax exemption for Veterans, vehicle registration discounts, and related fee waivers for driver’s licenses and license plates.

Disclaimer: This is general information, not legal advice. Exemptions and amounts are subject to change, so always verify the current information with your county appraisal district, county tax office, and the Texas Department of Motor Vehicles.

Texas gives partial exemptions on property taxes, as Texas Veteran property tax benefits, for any property owned by Veterans with a disability, their surviving spouses, and the children of dead Veterans who had a disability. The exemption amount a Veteran gets is determined by the disability rating they have received from the VA for military service or other reasons.

A useful resource is FAQs – Disabled Veteran and Surviving Spouse Exemptions.

Texas Veteran Property Tax Exemption by Disability Rating

When the Veteran’s disability rating is from 10 percent to 29 percent, they get an exemption of up to $5,000 deducted from the property’s value, 30 percent to 49 percent up to $7,500 deducted from the property’s value, 50 percent to 69 percent up to $10,000 deducted from the property’s value, and 70 percent to 100 percent up to $12,000 deducted from the property’s value.

A Veteran with a disability might possibly get an exemption of $12,000 deducted from the property’s value if the Veteran is 65 or more, with a minimum 10 percent disability rating, or who is completely blind (in one or two eyes) or has lost an arm or leg.

If a charitable 501(c)(3) donated your home to you (or sold it to you at ≤50% of market value), you may get a percentage exemption equal to your VA disability rating on that donated homestead.

A disabled Veteran awarded 100 percent disability compensation due to a disability from military service and a rating of 100 percent disabled or individual unemployability from the VA, gets a 100 percent exemption from taxation of the total value of the Veteran’s home.

For more details, please refer to the Texas Comptroller’s publication on Property Tax Exemptions.

Texas Disabled Veteran Property Tax Forms 50-135 and 50-114 (How to File)

The Veteran who is a property owner needs to apply to get a property tax exemption in the county where the property is situated, before the May 1 deadline each year. The chief appraisers for the appraisal district determine if a property qualifies for the exemption.

To apply, you need:

VA benefits summary letter showing your current disability rating.
A Texas driver’s license or ID with the same address as your homestead (required for homestead apps in most counties).
Any required proof (death certificates for surviving spouses, donation documents for donated homes, etc.)

There are 254 counties in Texas. The Texas Department of Motor Vehicles has an online searchable database of County Tax Offices, which is where to apply for property tax exemptions and fee waivers for driver’s licenses, vehicle title, and registration services, such as no-fee license plates for disabled Veterans.

Fill out Form 50-135 if you want the rating-based exemption on any property.

Fill out Form 50-114 if you want:

General homestead exemption
100% disabled Veteran residence homestead exemption
Donated homestead exemption for partially disabled vets

Surviving spouse exemptions on a homestead

Veteran Tax Refund Texas (State & Federal Credits)

For Texas specifically, there is no state personal income tax for individuals.

So, in Texas, the Veteran tax “refunds/credits” aren’t about income tax, but rather about property tax relief and exemptions for other fees.

If you receive compensation from the Veterans Affairs (VA) for a service-connected disability, that income is not taxable. You don’t include it in your gross income for federal tax filings. Similarly, various grants for motor vehicles, home adaptation expenses needed due to your service-connected disability, may be excluded.

If the VA retroactively increases your disability rating, you may be able to file an amended federal tax return for previous years to get a refund of taxes paid.

Sales Tax Exemptions for Veterans in Texas

Texas does not yet have specific sales and use tax exemptions for Veterans. Instead, disabled vets qualify for the same exemptions as people with disabilities.

Please refer to this chart of Items and Services Exempt from Sales and Use Tax.

Many items are always exempt, but others are exempt only if you have a doctor’s prescription or fill out Form 01-339 – Texas Sales and Use Tax Exemption Certification when purchasing an exempt item and give the form to the seller.

There is an exemption for the motor vehicle sales tax if you are orthopedically handicapped. Use Form 14-318 Texas Motor Vehicle Orthopedically Handicapped Exemption Certificate with the vehicle dealer or with the county Tax Assessor when getting the title.

There is a new program coming into effect in 2026, where qualified disabled Veterans will be able to buy up to $25,000 per year in taxable personal property tax-free, by giving an exemption certificate to the seller.

Vehicle Registration Discounts & Disabled-Veteran Plates

Eligible disabled Veterans can get Disabled Veteran license plates and registration fee relief. For the first set of DV license plates, the plate fee is $3. For that vehicle, annual registration and many local fees are waived. For additional vehicles, you have to pay the regular fees.

Confirm you qualify with a ≥50% VA disability rating. Download and use the TxDMV Form VTR-615. You will need your VA disability documentation letter, your Texas driver’s license or ID, and current registration info for the vehicle.

You can also get a disabled parking placard with no fee. If your disability rating is 60% or more, you get a free driver’s license or identification card.

Estate Planning for Veterans in Texas

In this Texas Veterans estate planning guide, we cover the essentials of estate planning for Veterans and their families and the rules for having a VA fiduciary in Texas.

Veteran Estate Planning Texas

This overview may help you with your estate planning. Be sure to work with a qualified financial professional and lawyer as needed.

Here are examples of Texas Veteran-focused estate strategies:

Creating a Benefits Preservation Trust

This is a trust created so that a Veteran can qualify for VA payments and benefits without having disqualifying assets. This trust helps protect savings if long-term care is needed. This strategy is useful when a Veteran wants to transfer home equity or savings and still keep control through a trustee.

Disability-Rating-Integrated Property Plan

For Texas Veterans with 100% disabled status, property can pass to an heir using a Transfer-on-Death Deed to avoid probate. This strategy maintains the Veteran’s property tax exemption eligibility during their lifetime and allows the surviving spouse to retain the full homestead exemption.

When you set this up properly, the property transfers instantly upon death, without court involvement, and avoids an unexpected tax increase.

Long-Term Care Protection Strategy

The goal of this strategy is to pay for in-home care or assisted living without wiping out the family’s estate. You use the VA Aid & Attendance benefits, which are income-based and not dependent on service, along with Medicaid, and any long-term annuities or long-term care insurance. Assets can be protected in trusts after the VA’s three-year look-back window.

Military Pension Structuring

Retired service members may maximize pension value by choosing beneficiaries, managing disability ratings, and tax exclusions, thereby ensuring their military pension continues to be paid to their surviving spouse/children without going through probate

This strategy may be paired with a revocable living trust.

Special Needs Trust for a Disabled Spouse or Child

If the wartime Veteran qualifies for VA Aid & Attendance now or might qualify in the future, a Special Needs Trust (SNT) protects VA eligibility, shields assets from Medicaid if long-term care is needed later, and ensures that family members with disabilities keep SSI/Medicaid. This is one of the most common Veteran-focused estate tools.

Charitable Legacy Plan for Veteran Causes

Veterans frequently leave legacy gifts to VA medical centers and local Veteran assistance nonprofits by using donor-advised funds, charitable remainder trusts, and life insurance beneficiary designations.

These are just a few suggestions of things to consider. Be sure to work with a qualified estate planner and attorney in Texas who specializes in estate planning for Veterans.

Texas Veteran Estate Lawyer Directory

It is crucial that you get proper legal advice. Here is a directory for trusted legal aid and accredited estate attorneys in Texas.

VA Fiduciary Program Overview (Texas-Specific)

The VA fiduciary program protects Veterans who need assistance with financial matters. A Veteran living in Texas can choose a VA fiduciary if they are capable of doing so, or the VA may require a fiduciary to handle the VA benefit payments under certain circumstances.

The VA may require a fiduciary when a Veteran has serious mental problems or if a medical provider states the Veteran cannot manage their finances. Other reasons include when a Veteran has a guardian under Texas law and if the Veteran misses paying bills repeatedly, is being financially exploited, or is vulnerable to fraud. A court, doctor, or family may report concerns to the VA.

The VA makes the final determination about the VA fiduciary, not the state, doctor, or the family.

The VA prefers to choose a fiduciary from this list, in this order:

Spouse
Relative (parent, adult child, sibling)
Close friend
Court-appointed guardian (Texas guardianship)
Professional fiduciary organization

Texas-Specific Features of the VA Fiduciary Program

Texas VA Field Examiners (FE) conduct home visits to meet with the Veteran and any proposed fiduciary to verify living conditions, determine the Veteran’s decision-making ability, assess any financial risks, and decide if the proposed fiduciary is suitable.

Texas fiduciaries must undergo background checks. If the fiduciary is not a spouse or a close family member, the VA requires a criminal history review, a credit report review, and reference checks.

If the FE believes the Veteran is being financially abused, they must notify local law enforcement, Texas Adult Protective Services, and the Elder Exploitation Unit of the Texas Office of the Attorney General.

If the VA approves the fiduciary, they must handle the financial affairs of the Veteran properly, in terms of the VA money received, and the financial records are subject to audit.

Texas Veterans can appeal VA incompetency determinations, request replacement of a bad fiduciary, report abuse to Texas APS (1-800-252-5400), and request a new field examination.

Final Thoughts

We hope this overview of benefits and this Texas Veterans estate planning guide is helpful. We encourage Veterans and their families to take action to get all the benefits they deserve. Remember, it’s important to gather key documents— DD-214, disability rating letter, and tax forms—before applying.

We encourage Veterans to contact their local county tax office, the Texas Veterans Commission for tax help, and a Veteran-focused estate planning attorney for personalized help.

By taking care to get the benefits you deserve, working with the Texas Veterans Commission for tax help, and making the proper arrangements for estate planning, you will have the reassurance that utilizing these benefits can help you manage long-term financial stability and improve your peace of mind.